Kannukiniyal vs Santhosimatha Finance

V. Periya Karuppiah, J.—Crl. O.P. (MD) No. 9815 of 2010 has been filed by the Petitioner, who is ranked as second accused in the

complaint in C.C. No. 228 of 2010 on the file of the learned Judicial Magistrate No. I, Trichy u/s 138 of the Negotiable Instruments Act, 1881, to

quash the said complaint proceedings against her.

Crl. O.P. (MD) No. 9816 of 2010 has been filed by the Petitioner, who is ranked as second accused in the complaint in C.C. No. 229 of 2010

on the file of the learned Judicial Magistrate No. I, Trichy u/s 138 of the Negotiable Instruments Act, 1881, to quash the said complaint

proceedings against her.

The Petitioner in both the petitions is ranked as second accused in the proceedings pending before the learned Judicial Magistrate No. I, Trichy

in C.C. Nos. 228 and 229 of 2010 and the first accused in both the cases is her husband and the complainant in both the cases is one and the

same person.

Heard Mr. S. Ramachandran, the learned Counsel appearing for the Petitioner and Mr. R. Sundar, the learned Counsel appearing for the

Respondent in both the petitions.

The learned Counsel for the Petitioner would submit in his arguments that the case in C.C. No. 228 of 2010 was taken on file by the lower

Court on a private complaint filed by the Respondent/complainant u/s 138 Negotiable Instruments Act, 1881 in which it was stated by the

Respondent that a sum of Rs. 5,00,000/-was borrowed jointly by the Petitioner and her husband on 20.04.2007, from the complainant, agreeing

to repay the same with interest at 6% per annum and the Petitioner and her husband have issued a cheque for a sum of Rs. 8,00,000/-in discharge

of the above debt on 24.04.2010 and since the cheque was dishonoured for want of sufficient funds, a complaint has been filed.

Similarly, the Respondent had preferred yet another private complaint before the Court and the said complaint was taken on file as C.C. No.

229 of 2010 for the allegations that the Petitioner and her husband borrowed a sum of Rs. 5,00,000/-on 09.07.2007 agreeing to repay the same

with interest at 6% per annum and have executed a promissory note on the same date in favour of the Respondent and deposit of title deeds were

done by the Petitioner with an intention to create an equitable mortgage on 10.07.2007 and executed a memorandum of deposit of title deeds also

and thus, created an equitable mortgage. In discharge of the said loan, on 27.04.2010, the first accused on behalf of his wife, the Petitioner herein

also has issued a cheque at Trichy dated 27.04.2010 for a sum of Rs. 7,75,000/-drawn at Dhanalakshmi Bank limited, Trichy and the said cheque

was not honoured, when it was presented and it was returned as insufficient fund and therefore the complaint was filed.

He would also submit that both the complaints were taken on file by the lower Court without looking into the fact that the first complaint was

already barred by law of limitation and also the fact that the Petitioner in both the petitions is said to be a promisor of the alleged debts in favour of

the Respondent. The cheque was given by the first accused only from a joint account held by both the accused persons and the Petitioner herein

was not admittedly the drawer of the said cheques and therefore, the lower Court ought not to have taken cognizance of the complaints against the

Petitioner, who was ranked as second accused.

He would further submit in his arguments that the Petitioner cannot be impleaded as one of the accused, since she was not a drawer of the

cheques in both the cases. He would also submit that it cannot be construed that the issuance of the cheque by her husband/first accused, was

done on behalf of the second accused, the Petitioner herein also. He would draw the attention of the Court to a judgment of this Court reported in

M. Seethalakshmi Vs. Suresh Bafna, Proprietor, Mansi Mercantile Co. rep. by his Power of Attorney G. Narasimhalu Chetty, for the principle

that only the drawer of the cheque can be tried for the commission of offence u/s 138 of the Negotiable Instruments Act, 1881. He would also

draw attention of this Court to yet another judgment of Andhra Pradesh High Court reported in 1998 (3) Crimes 543 in between (G. Surya

Prabhavathi v. Nekkanti Subrahmanyeswara Rao and Anr.) for the same proposition. He would therefore request the Court that the Petitioner,

who admittedly not a drawer of the cheque in both the cases, cannot be impleaded as a party to the complaint or accused in the proceedings and

therefore, the proceedings initiated against the Petitioner as second accused in both the cases may be ordered as quashed.

The learned Counsel for the Respondent would submit in his arguments that the question of limitation as argued by the learned Counsel for the

Petitioner in C.C. No. 228 of 2010 would not sustain because there was an agreement in between the parties after the lapse of three years period

for repaying the earlier time barred debt and in pursuance of the said agreement only the cheque was issued on 24.04.2010 and therefore, the

issuance of the cheque itself would be amounting to extending the period of limitation. Therefore, the issuance of the cheque in pursuance of a

subsequent agreement is valid in law and therefore, the lower Court was right in taking cognizance of the offence u/s 138 of the Negotiable

Instruments Act, 1881 and the complaint to the file. He would further submit in his argument that the drawer of the cheque had issued the cheque

for the debt incurred by both the accused and that too from a joint account. Therefore, the first accused who issued the cheque has acted as an

agent of the second accused and therefore, the second accused is also liable for the offence committed by the first accused. He would further

submit in his argument that the liability of both the accused namely the Petitioner and her husband are joint and several and one of the promisor''s

acknowledgment to debt is also amounting to the acknowledgment of the co-contractor and therefore, the issuance of cheque will equally bind the

Petitioner also and the Petitioner is liable for the offence committed by the first accused. Consequently the second accused, the Petitioner herein, is

also liable to answer the same and the complaint cannot be quashed without adducing full fledged evidence being recorded. He would also submit

that both the complaints are to be disposed of only after recording evidence and the point at issue can only be decided on the test of evidence and

therefore, the request of the Petitioner cannot be granted in these petitions. He would further submit that the judgments cited by the Petitioner are

not applicable to the present facts of the case, since the Petitioner is also under the liability to repay the said debt along with the first accused, her

husband. Therefore, he requests the Court to dismiss both the petitions.

I have given anxious consideration to the arguments advanced on either side. The complaint sought to be quashed are filed by the Respondent

as complainant before the lower Court u/s 138 of Negotiable Instruments Act, 1881. The alleged transactions namely borrowing Rs. 5,00,000/-on

two different dates and the issuance of cheques for Rs. 8,00,000/-and for Rs. 7,75,000/-by the first accused from a joint account with the second

accused namely the Petitioner herein are not seriously disputed in this case. However, the Petitioner had disputed the liability of the payment of the

debt borrowed on 24.04.2007 as a time barred one. What ever it may be, it has to be dealt with in a detailed enquiry.

As far as this case is concerned, the only point raised before this Court is that the two cheques issued by the first accused only, payable from

the joint account of the first accused and the second accused, the Petitioner herein, for Rs. 8,00,000/-and Rs. 7,75,000/-on 24.04.2010 and

27.04.2010, which were drawn by the first accused only. It has been averred in the complaint that the first accused had issued the cheque on

behalf of the second accused also. Therefore, it is clear that the second accused, the Petitioner herein, did not draw the cheques along with the first

accused when they were issued on both occasions, to the Respondent.

12 The concept of Section 138 of the Negotiable Instruments Act, 1881 is that the intention of the drawer, at the time of issuing the cheque has to

be considered for ascertaining the commission of any offence as per the provisions of the said Section. No doubt the Petitioner is a joint account

holder along with the first accused. But, she is not the drawer in both the cheques produced in both the proceedings. According to the judgment of

this Court reported in M. Seethalakshmi Vs. Suresh Bafna, Proprietor, Mansi Mercantile Co. rep. by his Power of Attorney G. Narasimhalu

Chetty, , it has been laid down as follows;

Not only from the construction of the provision of law u/s 138 of the Act, but also from the propositions held by the upper forums, two of which

were cited above, particularly the first case cited above wherein the learned Single Judge of the Andhra Pradesh High Court has clearly held that

under any pretext, no person other than one who has issued the cheque can be made an accused for the commission of the offence u/s 138 of the

said Act"", thereby quashing the proceedings against the Petitioner therein and since in the case in hand also similar facts and circumstances prevail,

the same decision could be arrived at in the present case also.

For the cheque issued by the husband for the loan obtained by him, just for the reason that in the borrowing of the loan a guarantee has been

given by the wife, the Petitioner herein, which could only be enforced in a civil forum for the liability and since the Petitioner is not a party to the

issuance of the cheque, she cannot be made a party or an accused for the prosecution of the bounced cheque u/s 138 of the Act and hence this

Court is of the considered view that the case registered as against the Petitioner in C.C. No. 4099 of 2001 on the file of the VIII Metropolitan

Magistrate, George Town, Chennai only becomes liable to be quashed.

In the said judgment, the judgment of the Andhra Pradesh reported in 1998 (3) Crimes 543 (cited supra) has been followed. The relevant passage

of the said judgment would be thus;

It is settled principle of law that penal provisions should be construed strictly and the emphasis is on the words ""such person"". It is manifest from

the expression of the words used in Section 138 of the Act ""Such person shall be deemed to have committed the offence"". relate to the person

who has drawn the cheque in favour of the payee and if the said cheque is returned unpaid on account of the conditions mentioned u/s 138 of the

Act, such person alone is liable but not other except the contingencies mentioned u/s 141 of the Act.

Admittedly, the Petitioner and the first accused in both the complaints are individual persons. The first accused is not a company, for which the

Petitioner is attracted by the provisions of Section 141 of the Negotiable Instruments Act, 1881 as a Director or Chairman of the said company or

as partner of the accused firm. Since the accused 1 and 2 are individual persons, the first accused being the drawer of the cheque, the second

accused who has not signed the cheque as a drawer cannot be impleaded in the commission of such offence u/s 138 of the Negotiable Instruments

Act. Therefore, no offence could be inferred against the second accused namely the Petitioner herein in both the petitions under the provisions of

Section 138 of the Negotiable Instruments Act, 1881. Therefore, this Court has no hesitation to pass an order of quashment of the complaints filed

against the Petitioner as second accused. Accordingly, both the petitions are ordered and the lower Court is directed to proceed with the

complaints only against the first accused in accordance with law.

For the aforesaid reasons the criminal original petitions are ordered. Consequently, the connected miscellaneous petitions are closed.